Belfast Telegraph

Province no longer 'a special case' for cuts

By Clare Weir

An economic expert has said Northern Ireland can no longer be described as a "special case" among UK regions forced to implement cuts after the Comprehensive Spending Review.

Esmond Birnie, senior economist at PricewaterHouseCoopers (PwC), was speaking at a conference on rebalancing the books in Northern Ireland, hosted by the Northern Ireland Community and Voluntary Association (NICVA).

Mr Birnie said criticisms of government cuts to the Northern Ireland block grant which aim to slash £4bn by 2015 were unwarranted.

"The reduction is average and in line with other devolved governments in Scotland and Wales," he said.

"We haven't been singled out for especially harsh treatment or, indeed, favourable treatment - it is just par for the course."

He said rebalancing Northern Ireland's economy away from its present reliance on the public sector would take at least 10 years.

"Standing still and doing nothing is not an option - more of the same leads to more of the same. Over three decades, the standard of living has remained flat. The reliance on the public sector still remains very high," said Mr Birnie.

"We've had a high decline in manufacturing, which only employs 85,000 people.

"And while there has been growth in the service sector, these are low wage, low productivity jobs - no compensation for the loss of traditional industries.

"The Northern Ireland economy only grows when there is a massive increase in public spending and another increase in public spending is not realistic."

Mr Birnie said the Northern Ireland economy could no longer rely on the Republic for a boost and that growth between 1998 and 2008 "added little to our productivity".

He went on: "More than a quarter of employment gained in that period has been lost in the downturn."

And, according to Mr Birnie, Northern Ireland should also modernise its public sector and look at other reforms.

"We can look at free prescriptions, free travel. But the argument that Northern Ireland is a special case won't wash anymore," he added.